CIP v CIQ: Recourse Against Arbitral Award - Setting Aside - Mining Joint Venture Dispute

In CIP v CIQ, the Singapore International Commercial Court addressed an application by CIP to set aside an arbitral award in favor of CIQ, concerning a dispute arising from a joint venture agreement related to a mining project in the Philippines. The court, presided over by Patricia Bergin IJ, heard arguments on 1 and 2 September 2021 and reserved judgment. The core issues revolved around alleged breaches of a Memorandum of Agreement (MOA) and the Joint Venture Agreement (JVA), the validity of the MOA's rescission, and the termination of the JVA. The court ultimately dismissed CIP's application, upholding the arbitral award. The claim involved a breach of contract claim.

1. Case Overview

1.1 Court

Singapore International Commercial Court

1.2 Outcome

Originating Summons dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore court dismisses CIP's application to set aside an arbitral award favoring CIQ in a mining joint venture dispute, addressing breaches of contract.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
CIPApplicant, RespondentCorporationApplication DismissedLostToby Landau, Liang Hanwen Calvin, Yu Kexin, Tnee Zixian Keith, Chin Wan Yew Rachel, Leong Lijie, Teo Jin Yun Germaine
CIQRespondent, ClaimantCorporationJudgment UpheldWonDavinder Singh, Jaikanth Shankar, Fong Cheng Yee David, Gerald Paul Seah Yong Sing

3. Judges

Judge NameTitleDelivered Judgment
Patricia BerginInternational JudgeYes

4. Counsels

Counsel NameOrganization
Toby LandauDuxton Hill Chambers (Singapore Group Practice)
Liang Hanwen CalvinDuxton Hill Chambers (Singapore Group Practice)
Yu KexinYu Law
Tnee Zixian KeithTan Kok Quan Partnership
Chin Wan Yew RachelTan Kok Quan Partnership
Leong LijieTan Kok Quan Partnership
Teo Jin Yun GermaineTan Kok Quan Partnership
Davinder SinghDavinder Singh Chambers LLC
Jaikanth ShankarDavinder Singh Chambers LLC
Fong Cheng Yee DavidDavinder Singh Chambers LLC
Gerald Paul Seah Yong SingDavinder Singh Chambers LLC

4. Facts

  1. CIP and CIQ entered into a Joint Venture Agreement (JVA) for a mining project in the Philippines.
  2. CIP was to acquire up to a 36% interest in the JV by providing funding, drilling, and management services.
  3. A dispute arose regarding CIP's equity interest and its entitlement to be named as a co-permittee.
  4. The Exploration Permit (EP) expired, leading to the suspension of drilling operations.
  5. The parties entered into a Memorandum of Agreement (MOA) to resolve their disputes.
  6. CIQ rescinded the MOA, alleging breaches by CIP, and terminated the JVA.
  7. CIQ commenced arbitration proceedings seeking declarations and damages for breaches of the MOA and JVA.

5. Formal Citations

  1. CIP v CIQ, , [2021] SGHC(I) 13

6. Timeline

DateEvent
Joint Venture Agreement signed.
Joint Venture Agreement amended.
Memorandum of Understanding signed.
Application for Exploration Permit renewal lodged.
Exploration Permit expired.
Supplemental Agreement signed.
Memorandum of Agreement signed.
Joint letter sent to Mines and Geosciences Bureau.
Exploration Permit renewed.
List of Properties Purchased sent.
Subscription Agreement executed.
Revised deadline suggested to complete due diligence.
Draft Shareholders’ Agreement sent.
Implementation of Memorandum of Agreement suspended.
Amended General Information Sheet filed.
Memorandum of Agreement rescinded.
Civil claim filed in Regional Trial Court.
Formal Notice of Rescission of Memorandum of Agreement sent.
Joint Venture Agreement terminated.
Notice of Arbitration issued.
Response to Notice of Arbitration filed.
Respondent's Memorial filed.
Applicant's Counter-Memorial filed.
Respondent's Reply Memorial filed.
Applicant's Rejoinder Memorial filed.
Respondent's Rejoinder Memorial filed.
Agreed Pre-Hearing Documents filed.
Respondent applied to amend Memorial.
Respondent applied for leave to disclose additional emails.
Tribunal allowed amendment to Memorial.
Substantive oral hearing began.
Substantive oral hearing concluded.
Tribunal requested Post-Hearing Briefs.
Applicant applied to introduce Surface Rights Email.
Tribunal rejected application to introduce Surface Rights Email.
Respondent sought leave to disclose Metropolitan Trial Court Order.
Applicant consented to respondent’s request and Tribunal approved it.
Post-Hearing Briefs submitted.
Reply Post-Hearing Briefs submitted.
Tribunal directed parties to provide clarification and further expert reports.
Parties directed to provide responses.
Respondent requested further oral hearing.
Applicant responded to respondent’s request.
Respondent pressed for oral hearing.
Tribunal convened teleconference.
Further oral hearing held by teleconference.
Award issued.
Originating Summons filed in High Court of Singapore.
Proceedings transferred into Singapore International Commercial Court.
Proceedings heard.
Proceedings heard.
Final submissions filed.
Judgment reserved.

7. Legal Issues

  1. Setting Aside Arbitral Award
    • Outcome: The court dismissed the application to set aside the arbitral award.
    • Category: Procedural
    • Sub-Issues:
      • Breach of natural justice
      • Decision beyond scope of submission to arbitration
      • Failure to provide full opportunity to present case
  2. Breach of Contract
    • Outcome: The arbitral tribunal found that CIP breached the MOA and JVA in several respects.
    • Category: Substantive
    • Sub-Issues:
      • Failure to negotiate in good faith
      • Failure to remit funds
      • Failure to transfer surface rights
      • Unjustified demands
  3. Rescission of Contract
    • Outcome: The arbitral tribunal found that CIQ was entitled to rescind the MOA due to CIP's breaches.
    • Category: Substantive
    • Sub-Issues:
      • Material breach
      • Compromise agreement
      • Reciprocal obligations
  4. Termination of Joint Venture Agreement
    • Outcome: The arbitral tribunal found that CIQ was entitled to terminate the JVA due to CIP's breaches.
    • Category: Substantive
    • Sub-Issues:
      • Breach of material provision
      • Failure to correct breach
      • Good faith

8. Remedies Sought

  1. Setting Aside Arbitral Award
  2. Declarations
  3. Specific Performance
  4. Injunction
  5. Indemnity

9. Cause of Actions

  • Breach of Contract
  • Breach of Fiduciary Duty

10. Practice Areas

  • Commercial Arbitration
  • International Arbitration
  • Commercial Litigation

11. Industries

  • Mining

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
John Holland Pty Ltd (formerly known as John Holland Construction & Engineering Pty Ltd) v Toyo Engineering Corp (Japan)N/AYes[2001] 1 SLR(R) 443SingaporeCited for the requirements to be satisfied in an application alleging breach of natural justice.
Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte LtdN/AYes[2007] 3 SLR(R) 86SingaporeCited for the requirements to be satisfied in an application alleging breach of natural justice.
China Machine New Energy Corp v Jaguar Energy Guatemala LLC and anotherN/AYes[2020] 1 SLR 695SingaporeCited for the requirements to be satisfied in an application alleging breach of natural justice.
L W Infrastructure Pte Ltd v Lim Chin San Contractors Pte Ltd and another appealN/AYes[2013] 1 SLR 125SingaporeCited for the 'real inquiry' in assessing alleged breaches of natural justice and their consequences.
Lao Holdings NV v Government of the Lao People’s Democratic Republic and another matterN/AYes[2021] 5 SLR 228SingaporeCited for the 'real inquiry' in assessing alleged breaches of natural justice and their consequences.
PT Prima International Development v Kempinski Hotels SA and other appealsN/AYes[2012] 4 SLR 98SingaporeCited for the principle that an arbitral tribunal’s jurisdiction is demarcated by what the parties agree to submit to the tribunal for determination.
CDM and another v CDPN/AYes[2021] 2 SLR 235SingaporeCited for the five sources to be considered in determining what was within the scope of the parties’ submission to arbitration.
Prometheus Marine Pte Ltd v King, Ann Rita and another appealN/AYes[2018] 1 SLR 1SingaporeCited for the principle that a “practical view” must be taken in identifying the substance of the dispute that was referred to arbitration.
PT Asuransi Jasa Indonesia (Persero) v Dexia Bank SAN/AYes[2007] 1 SLR(R) 597SingaporeCited for the two-stage inquiry in assessing whether an arbitral award should be set aside for deciding any issue not referred to the arbitral tribunal for determination by the parties.
JVL Agro Industries Ltd v Agritrade International Pte LtdN/AYes[2016] 4 SLR 768SingaporeCited for the principle that an issue raised in a party’s pleadings “remains in play throughout the arbitration” unless it is “expressly withdrawn”.
Sugar Australia Pty Limited v Mackay Sugar LtdN/AYes[2012] QSC 38N/ACited for the principle that the question of whether the issue remains in play will be assessed by the court having regard to the five sources referred to above and all the circumstances of what occurred between the parties during the arbitration including whether the issue was ever advanced or dealt with, even weakly, by either party.
OAO Northern Shipping Co v Remolcadores de Marin SL (The Remmar)N/AYes[2007] EWHC 1821 (Comm)N/ACited for the principle that the question of whether the issue remains in play will be assessed by the court having regard to the five sources referred to above and all the circumstances of what occurred between the parties during the arbitration including whether the issue was ever advanced or dealt with, even weakly, by either party.
William Hare UAE LLC v Aircraft Support Industries Pty LtdN/AYes[2014] NSWSC 1403N/ACited for the principle that the question of whether the issue remains in play will be assessed by the court having regard to the five sources referred to above and all the circumstances of what occurred between the parties during the arbitration including whether the issue was ever advanced or dealt with, even weakly, by either party.
AKN and another v ALC and others and other appealsN/AYes[2015] 3 SLR 488SingaporeCited for the principle that as there is no right of appeal from an international arbitral award the court must resist engaging with what is substantially an appeal on the legal merits of an arbitral award, but presented as a challenge to process failures during an arbitration.
Triulzi Cesare SRL v Xinyi Group (Glass) Co LtdN/AYes[2015] 1 SLR 114SingaporeCited for the principle that an arbitral tribunal has a wide discretion in making case management decisions and a court will not revisit such decisions in a setting aside application unless such decisions breach the rules of natural justice, including depriving a party of a reasonable opportunity to be heard.
BLC and others v BLB and anotherN/AYes[2014] 4 SLR 79SingaporeCited for the principle that where a party takes a point and does not see it through, for example, by dropping it, it cannot use the process to set aside the Award as an opportunity to run the point afresh.

13. Applicable Rules

Rule Name
SIAC Rules (6th Edition, 2016)

14. Applicable Statutes

Statute NameJurisdiction
International Arbitration ActSingapore
UNCITRAL Model Law on International Commercial ArbitrationN/A
Civil Code of the Philippines (Republic Act No 386)Philippines

15. Key Terms and Keywords

15.1 Key Terms

  • Joint Venture Agreement
  • Memorandum of Agreement
  • Exploration Permit
  • Surface Rights
  • Co-permittee
  • Due Diligence
  • Rescission
  • Termination
  • Arbitral Award
  • Mining Project
  • Shareholders’ Agreement
  • JV Fund
  • Material Provision

15.2 Keywords

  • arbitration
  • contract
  • mining
  • joint venture
  • setting aside
  • breach of contract
  • natural justice

16. Subjects

  • Arbitration
  • Contract Law
  • Mining Law
  • Joint Ventures

17. Areas of Law

  • Arbitration Law
  • International Commercial Law
  • Contract Law
  • Civil Procedure
  • Mining Law